Mubadala seizes on 144% stock rally to sell stake in Aldar Properties

Abu Dhabi wealth fund Mubadala Investment Co. sold a $950m stake in Aldar Properties, cashing in on a surge in the developer’s shares after it was awarded contracts worth billions of dollars.

Mubadala, the $232bn sovereign wealth fund, sold a 12 per cent stake in Aldar to Alpha Dhabi Holding, a name little known to investors. Mubadala will remain the largest shareholder in the company, which is the biggest developer in the United Arab Emirates, with a 25 per cent stake.

Aldar’s stock is up 144 per cent over the past year after the company became the developer of choice for Abu Dhabi, which signed off on deals worth $12.3bn in January. Its shares retreated 0.8 per cent Wednesday, and are up 19 per cent for the quarter.

“Mubadala’s ability to monetise part of the Aldar stake is good news,” said Mohammed Ali Yasin, chief strategy officer at Al Dhabi Capital Ltd. “The question is: will this strategic investor be dormant or will he be looking to change things. And in that case the fact Mubadala kept a large stake should be reassurance of continued government support for the developer.”

The buyer of Mubadala’s stake is a subsidiary of Alpha Dhabi, Sublime Commercial Investment, which has few investments in the country.

As of March 23, Sublime owned about $64m in minority stakes in two other companies listed in Abu Dhabi – Palm Sports PrJSC and Zee Stores PrJSC. Both companies are majority owned by International Holdings Co, whose market value has surged over the past two years through a series of deals.

IHC is ultimately controlled by the Royal Group, a conglomerate that lists Sheikh Tahnoon Bin Zayed Al Nahyan as chairman.

Sheikh Tahnoon is the brother of Abu Dhabi’s crown prince, Mohammed bin Zayed al Nahyan, who is considered the emirate’s de facto ruler.

The Mubadala-Alpha Dhabi deal was carried out by International Securities, also controlled by IHC, and ADCB Securities, ultimately owned by the Abu Dhabi Investment Council.